The tech industry layoffs don’t seem to stop anytime soon. And Snapchat just announced layoffs. Its parent company, Snap Inc., stated in a securities filing that it will be laying off 10% of the total workforce. Most importantly, it’s the company’s third round of layoffs in recent times, including a 20% cut in 2022 and a 3% cut last year.
Snapchat layoffs will affect more than 500 employees
According to a report from Variety, Snap had around 5,367 employees by the end of Q3 2023. Hence, the recent Snapchat layoffs will impact approximately 540 employees. While specific details about the affected positions or departments are limited, it’s safe to assume that Snap is focusing on areas that aren’t contributing enough to their profits. In response, Snap plans to set aside up to $75 million for severance and related expenses.
Notably, Snap’s shares went up by more than 2% before the stock market opened after the announcement. On the same note, Snap’s CEO Evan Spiegel has big plans for the year ahead. The company aims to increase daily users by approximately 17%, boost ad revenue by 20%, and double Snapchat Plus subscribers from the current 7 million, as earlier reported by The Verge.
It’s a part of “reorganizing” the team
A Snap spokesperson told CNBC that this layoff is part of team reorganizing. “We are reorganizing our team to reduce hierarchy and promote in-person collaboration.” They added, “We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap.”
Snapchat and similar apps make money mostly from online ads. But lately, the online ad market has been slow. If we quickly check Snap Inc.’s business, we see that Year-on-Year revenue growth was only 5% as of Q3, 2023. This means that Snap Inc. is finding it tough to keep up with the changes and competition in online advertising. We’ll know more about Snap Inc.’s money situation when the next report comes out on February 6th.
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